USD/CAD: Technical outlook and review.

Weekly Timeframe: Last week shows that the buyers were unable to close above the 1.12775 high. Be that as it may, we still feel that the majority of sellers here were well and truly consumed with that humongous wick coming in at 1.13842, and as a result there is a good chance higher prices could still be seen.

Daily Timeframe: The daily timeframe shows that even though price was unable to close above the 1.12775 high on the weekly timeframe , it certainly did on the daily timeframe , which in our view indicates buying strength. At the time of writing, price is trading around a daily decision-point demand area seen at 1.10807-1.11719. Assuming bullish price action is seen on the 4hr timeframe, this could be a fantastic place to go long. However, in the event that this area is consumed, we can likely assume higher prices will not be seen just yet!

4hr Timeframe: Price is currently seen consolidating on the 4hr timeframe between a combined 4hr demand/round number area at 1.11837-1.12186/1.12 (located just within the daily decision-point demand area mentioned above at 1.10807-1.11719), and a small 4hr supply area coming in at 1.12953-1.12813. Ideally, what we would like to see here is a push above both the small 4hr supply area, and the 1.13 level. This would in our opinion clear the path north up to around the 1.14 level, and at the same time likely imply buying strength from the aforementioned daily decision-point demand area. Why have we not included the 4hr supply area at 1.13842-1.13352? The answer is simply because this area has already likely been weakened by the touch seen on the 16/10/14 at 1.13601.

Assuming the above takes place, where could one buy into this action? If the 1.13 sees a positive close above, you could attempt to trade the retest with a small stop targeting the 1.14 level. However, as price action develops there will likely fresh demand areas forming, which one could also trade.